Is This Bullish Enough for You?

A week after a bundle of big-bank strategists adopted rosier views on stocks, Canaccord Genuity strategist Tony Dwyer has ratcheted up his bullish call. He raised his 2013 year-end target for the Standard & Poor’s 500-stock index to 1760. Yes, you read that right–not 1670, 1760. That’s a 13% rise before the end of the year, even after an 8.8% gain so far this year.

The big-bank strategist targets “came up to where I was,” Dwyer laughed. “But it had nothing to do with them.”

Dwyer’s call is based on the thought that investors will pay more for earnings–he expects companies in the S&P 500 to earn $110 per share this year. He thinks that will be a result of relatively low levels of inflation, as historically, he has found that investors are usually willing to pay more for companies’ earnings when inflation is low.

Still, though, Dwyer thinks the stock-market rally could be about to stall.

“I’m expecting a correction,” he told MarketBeat on Tuesday. In his note, he wrote that it appears “obvious” that stocks are due for a pullback given the strong 2013 rally and what looks like a short-term loss of momentum–though today’s trading doesn’t look much like a correction, with the Dow Jones Industrials Average notching triple-digit gains in midmorning trading.

But he thinks stocks will eventually pull back.

“I’m telling people to not flee the market when it happens. I’m telling them to buy the market when it does,” he said.

His new call looks like a Wall Street high, going from data compiled by Birinyi Associates. Even with the target boosts last week from Goldman Sachs’s David Kostin Deutsche Bank’s David Bianco and Morgan Stanley’s former permabear Adam Parker, the average year-end target for 2013 is 1558.

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